Correlation Between Inventiva and AnaptysBio
Can any of the company-specific risk be diversified away by investing in both Inventiva and AnaptysBio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Inventiva and AnaptysBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and AnaptysBio, you can compare the effects of market volatilities on Inventiva and AnaptysBio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Inventiva with a short position of AnaptysBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and AnaptysBio.
Diversification Opportunities for Inventiva and AnaptysBio
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inventiva and AnaptysBio is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and AnaptysBio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnaptysBio and Inventiva is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Inventiva Sa are associated (or correlated) with AnaptysBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnaptysBio has no effect on the direction of Inventiva i.e., Inventiva and AnaptysBio go up and down completely randomly.
Pair Corralation between Inventiva and AnaptysBio
Considering the 90-day investment horizon Inventiva Sa is expected to under-perform the AnaptysBio. But the stock apears to be less risky and, when comparing its historical volatility, Inventiva Sa is 1.82 times less risky than AnaptysBio. The stock trades about -0.03 of its potential returns per unit of risk. The AnaptysBio is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,389 in AnaptysBio on October 25, 2024 and sell it today you would earn a total of 299.00 from holding AnaptysBio or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva Sa vs. AnaptysBio
Performance |
| Timeline |
| Inventiva Sa |
| AnaptysBio |
Inventiva and AnaptysBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and AnaptysBio
The main advantage of trading using opposite Inventiva and AnaptysBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, AnaptysBio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AnaptysBio will offset losses from the drop in AnaptysBio's long position.| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux Therapeutics | Inventiva vs. Rezolute |
| AnaptysBio vs. Crinetics Pharmaceuticals | AnaptysBio vs. Rhythm Pharmaceuticals | AnaptysBio vs. Kura Oncology | AnaptysBio vs. CytomX Therapeutics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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